Changes to Oregon’s landlord-tenant laws coming in 2014

Changes to landlord-tenant law in Oregon that take effect in 2014 have something for both renters and landlords.

The Landlord-Tenant Coalition Omnibus Bill, Senate Bill 91, passed by the Legislature in May with near unanimous consent, takes effect Jan. 1. It allows landlords to require tenants to obtain renter’s insurance, with some limitations that effectively exempt low-income renters. The law also gives renters a break for evictions that are five or more years old. And it gives landlords the ability to charge fees to renters who break some terms in their leases.

One important change affecting the rental market does not take effect until July 2014. Landlords will no longer be able to turn away prospective, low-income tenants solely because they rely on government subsidies to help pay their rent, so-called Section 8 vouchers. That change comes with House Bill 2639, a measure introduced by state House Speaker Tina Kotek, D-Portland.

“No landlord will be forced to accept Section 8 under this law,” wrote Jim Straub of Eugene, legislative director for the Oregon Rental Housing Association Inc., in the October newsletter. “But no landlord will be able to refuse to rent to someone solely because their income is a Section 8 voucher.”

Landlord groups in Oregon did not contest Kotek’s bill, however, because she granted concessions. For example, the bill creates a mitigation fund on which landlords may make claims up to $5,000 for property damage by Section 8 tenants, said John Van Landingham, a Lane County attorney, renter advocate and coalition member,

“That was a big part of the bill,” Van Landingham said Tuesday. “All three landlord groups didn’t support it, but they didn’t oppose it. They were neutral.”

SB 91

The General Landlord Tenant Coalition negotiates changes every year to the landlord-tenant law in Oregon. It grew from two people in 1993 to sometimes more than 20 people gathered in the same room, Van Landingham said. “The coalition typically works by compromise and horse trading,” he said.

SB 91 passed both state legislative chambers with only two no votes, cast by state Rep. Kim Thatcher, R-Keizer, and state Sen. Doug Whitsett, R-Klamath Falls, whose district includes parts of Crook and Deschutes counties.

“I don’t believe the state Legislature has any constitutional authority to tell a landowner what he can or can’t do in a rental agreement,” Whitsett said Monday. “We keep getting, it seems, with each passing legislative session, we keep putting more and more restrictions on owners of property, what they can and cannot do with that property.”

After Jan. 1, landlords may require tenants to obtain renters’ insurance to a maximum $100,000 coverage. However, landlords may not impose the insurance requirement on tenants who earn 50 percent or less of the median income in their area. In Deschutes County — including Bend, where the rental vacancy rate has been 1 percent —the median income for 2013 is $59,700 according to the U.S. Department of Housing and Urban Development.

Criminal record

Another change will prohibit landlords from turning away prospective tenants based solely on an eviction elsewhere more than 5 years old, or who were subject to an eviction that was dismissed or resolved in the tenants’ favor.

Landlords may still screen tenants for certain crimes, particularly those involving drugs, sex, violence or financial fraud, for example. But, they may not deny an applicant based on an arrest that did not result in a conviction or a charge that was dismissed.

The law is not as restrictive as it seems. Landlords may still deny an applicant based on a poor reference from a previous landlord.

“A lot of people get arrested and never charged with a crime, especially homeless people,” Van Landingham said. “Our view is that (denials based on arrests) may well be disproportionately impacting on minorities, racial minorities and, especially, homeless people.”

Finally, the omnibus bill allows landlords to charge fees for failing to comply with seven specific lease terms, including two new ones: smoking in a unit and keeping unauthorized pets, according to the legislative summary. In addition, after a first-time warning, landlords may charge a $50 fee for a second violation, according to the Oregon Rental Housing Association. For subsequent violations, landlords may charge $50 plus 5 percent of the monthly rent, according to the association.

But it restricts landlords from deducting fees from rent payments and charging another fee for late rent.

Straub, the association’s legislative director, said landlords in 2009 lost some power to charge noncompliance fees, due in part to abuses by some. Regaining that authority for two more instances is a major gain. He described fees as a “very important tool to deter behavior.”

Likewise, the power to require renter’s insurance protects renters, as well as landlords. An apartment fire, for example, could burden an uninsured client with a financial obligation that derails career plans, Straub said.

Landlords, in general, are wary of the implications of Kotek’s Section 8 bill, he said. But Straub endorsed it Wednesday. The mitigation fund effectively creates a $5,000 security deposit for every Section 8 tenant, he said.

Overall, he said, landlords benefited from the 2013 changes. “Yes, absolutely,” Straub said. “I believe we got more than we gave.”